Futuristic Space Gambits -- Low Stock Market Interest
Futuristic Space Gambits -- Low Stock Market Interest
A SpaceX Falcon 9 rocket
about to launch the company’s Crew Dragon spacecraft is seen before the
Demo-2 mission with NASA astronauts Robert Behnken and Douglas Hurley
onboard. NASA/Joel Kowsky |
"From commercial space launches related to satellites and space tourism, or even more futuristic things like asteroid mining -- a lot of it is a completely unproven industry, and it is not clear how much demand there is."Jay Jacobs, head, research and strategy, Global X Management Co."It would be a tent-pole IPO [should Musk take his space venture public]. It is that single asset that can focus people's attention and make them understand what is space investing about.""It isn't about going to Mars or tourism, but getting hardware to space that is current updated technology.""You can think of space stocks in the last two years as kind of the dotcom bubble. There is an initial burst of enthusiasm, then interest dies off and then a couple of years later you realize that maybe a lot of the seeds died but the ones that survived have become systematically important."Nicholas Colas, co-founder, DataTrek Research"When you see a company worth half a trillion dollars entering the markets, that is bound to attract some attention for other stocks in that market.""There is still a public misconception of what space is, how space affects us, and there is this massive educational curve that we still haven't seen investors truly grasp."Andrew Chanin, chief executive, ProcureAM
Virgin Galactic’s spacecraft Unity reaches space for the first time. Source: Virgin Galactic |
Space
exploration, space travel, space tourism, space opportunities for
mineral exploitation. All of it eliciting great interest and excitement
in the public imagination. It's exciting, it's romantic, it's
challenging and demonstrably feasible. Exhibitions so far by private
companies operated by charismatic celebrities, public figures of renown,
whose wealth is such that they are enabled to dabble professionally in
the arcane stuff of science fiction brought to life.
Space,
and travel, and mineral extraction, all topics of huge public interest
and certainly allying with the interests of governments some of which
are themselves entering the same heavenly realm of pushing new frontiers
of space exploration -- merging that with the benefits they envision
will accrue to them through the prospect of the increasing
militarization and intelligence-gathering via communication satellites,
all point to an exciting, if fraught future.
So
who is putting their investment dollar where their excited fascination
leads them? Aside, that is, from those of the ilk of Elon Musk, Jeff
Bezos and Richard Branson. The futuristic allure of these visionaries'
enterprises has attracted plenty of public attention, particularly after
their space travel businesses got off to a much-heralded start when
Virgin Galactic and Blue Origin made their maiden tourist flights to
great acclaim and great visuals.
And
has that translated into elevated space stocks? Not so that anyone in
the business of monitoring the situation has yet noticed. The initial
space-focused euphoria appears not to have elicited much in the way of
investment in the stock market. The tourism flights by Richard Branson's
publicly traded Virgin Galactic Holdings Inc., and Jeff Bezos's
privately held Blue Origin, and yes, Musk's SpaceX, appears to have
failed in overcoming doubts in viewing these ventures as true-blue
business -- or a billionaires' playground.
Blue Origin’s New Shepard rocket booster lands after its eleventh successful mission. Blue Origin |
Space
tourism is in the category of an unproven industry. Other than Virgin
Galactic not many public companies are in existence as yet, and
exchange-traded funds still lack one dedicated to space. Companies
trading on exchanges look for attraction with the aid of a charismatic
front-runner to help focus the attention of the market. Word is that
should Elon Musk's Space Exploration Technology Corp. turn public, the
issue of a charismatic cheerleader would be solved.
Electric
Vehicle makers got a big boost when Tesla Inc. realized runaway success
as a company and a stock, last year. Musk is credited by many with
having led the automotive industry forward to its electric future. Space
stocks could use the boost that would accrue if Musk took his
space-oriented vision public. He has publicly spoken of possibly turning
carbon dioxide into spacecraft fuel, building massive rockets, heading
for Mars within a decade.
His
1,700 satellite network identifies him as a private, world-class player
in space communications, drawing the ire of China for crowding its own
plans, a challenge China fails to appreciate. Commercial uses for space
travel loom large in the future, to include applications in military and
defence, telecommunications, mining, weather tracking -- and deep space
exploration.
Investors
for the time being, fail to be impressed. The Procure Space ETF,
trading under UFO, gained a mere 6 percent for 2021, badly trailing the
28 percent leap in the S&P 500 index. And how did Virgin Galactic
fare? a 45 percent tumble through delays to starting commercial
launches. The company isn't expecting, according to analysts, to derive
an annual net profit for the next three years.
Blue Origin launches a New Shepard rocket from its facility in Texas. Blue Origin | gif by @thesheetztweetz |
Labels: Market Investment, Space Applications, Space Communications, Space Technology, Space Tourism
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